The UK’s annual inflation plunged to 6.7% in August thanks to slowing food prices, with the cost of living now at its lowest level in a year and a half.
Price rises for milk, cheese and eggs slowed the most, followed by fish and vegetable costs.
The Consumer Prices Index, which tracks annual price changes, showed that inflation is now down from July’s 6.8%. It is the third month in a row that the figure has dropped.
This percentage is lower than the expectations of city economists, who forecasted a rise to 7%. But this still leaves inflation over three times above the UK’s target of 2%.
However, the slowdown of inflation does not mean that prices are falling – just that they’re increasing at a slower rate. Prices for food and drink were still 13.6% higher in August compared with a year earlier.
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Chancellor Jeremy Hunt said the news showed “the plan to deal with inflation is working”.
“But it is still too high which is why it is all the more important to stick to our plan to halve it so we can ease the pressure on families and businesses. It is also the only path to sustainably higher growth.”
ONS chief economist Grant Fitzner said: “The rate of inflation eased slightly this month driven by falls in the often-erratic cost of overnight accommodation and air fares, as well as food prices rising by less than the same time last year.
“This was partially offset by an increase in the price of petrol and diesel compared with a steep decline at this time last year, following record prices seen in July 2022.
“Core inflation has slowed this month by more than the headline rate, driven by lower services prices.”
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